New Study: $10.10 Minimum Wage Could Eliminate As Many As One Million Entry-Level Jobs

  • Publication Date: January 2014

  • Topics: Minimum Wage

WASHINGTON – Today, the Employment Policies Institute (EPI) released a new analysis estimating that at least 360,000 jobs — and as many as 1,084,000 jobs — would be eliminated if the federal minimum wage were raised to $10.10. EPI also has a full-page ad in The New York Times today highlighting how ineffective wage hikes are in reducing poverty.

The analysis, which includes data for all 50 states, can be viewed here. The ad can be viewed here.

The ad shows a photo of a destitute person with a sign that reads: “I don’t need a raise. I need a job.” In bold text, the ad says “The Best Weapon in the War on Poverty Is a Job.” It goes on to explain: “President Obama and Senate Democrats want to raise the minimum wage to $10.10 to help the poor. But nearly 60 percent of the working-age poor don’t have a job and wouldn’t be affected. Of those who would receive a raise, just 13 percent live in poor families. That’s why most studies show a wage hike doesn’t reduce poverty.”

The vast majority of economic research from the last two decades confirms that a higher minimum wage reduces employment opportunities for the least-skilled jobseekers. This consensus has only been strengthened in recent years, including by a study forthcoming in Cornell University’s labor relations journal that refutes the research President Obama and Senate Democrats are relying on to make their case.

Michael Saltsman, research director at the Employment Policies Institute, released the following statement:
No amount of denial by the President and his political allies—and no number of “studies” published by biased researchers—can change the fact that minimum wage hikes eliminate jobs for low-skill and entry-level employees. Non-partisan economists have agreed on this consensus for decades, and the laws of economics haven’t changed.

Instead of raising small businesses’ labor costs and creating more barriers to entry-level employment, the President and the Senate should focus on policies that help reduce poverty and create jobs.